Archive for Supply Side Economics

Kansas State Budget

Posted in For Free Trade with tags , , , on June 9, 2017 by cavalier973

The government-worshipping thieves are crowing about recent developments concerning the Kansas State Budget, since “moderate” Republicans overrode Governor Brownback’s veto of a tax increase. The narrative is that the theory of “supply-side” economics has once again been shown to be a failure, since the State of Kansas is projected to have a budget deficit in 2019.

Perusing the recent articles that discuss the subject of the Kansas budget (here is an example), I see little to no actual numbers being discussed, beyond the amount of the projected deficit and the amounts allocated to departments in the Kansas government. It would be nice to have information stating something along the lines of: The Kansas state budget from FY 2015 to FY 2016 showed that state government revenues were $6.5 billion and $6.0 billion, respectively (showing an actual decrease in revenues), while expenditures for the same Fiscal Years were $6.4 billion and $6.1 billion, respectively (showing that the state’s expenditures were actually decreased).

According to a chart at the Kansas Budget Department’s site, it looks like state revenues did decrease after the 2012 “supply side” tax cut, from $6.412 billion in 2012 to $6.341 billion in 2013, and $5.653 billion in 2014. In 2015, revenues increased to $5.928 billion, and were projected to increased further in 2016 to $6.171 and to $6.326 billion in 2017.

Expenditures in 2012 were $6.098 billion, in 2013 they were $6.134 billion, in 2014 $5.982 billion, in 2015 $6.237 billion, in 2016 $6.322 billion, and in 2017 $6.398 billion.

This is from the FY 2017 Comparison report, which was published in August 2016, so the 2016 and 2017 numbers are estimates.

Notice, though, that while revenues dropped each year from 2012 to 2014, and increased thereafter, spending increased every year from 2012 to 2017, excepting for a drop in 2014 (and which by 2015 was higher than expenditures in 2013).

Something else about the Kansas Budget: courts declared that the state wasn’t funding schools equitably, and ordered the government to increase its spending in that area.

So, we have tax cuts, followed by decreases in revenue for a couple of years, followed by increases in revenues. Expenditures, however, continued to grow, in part due to a court system that compels the government to spend more than it otherwise would.

But  “supply side economics” is to blame. Riiiiight.

It would be interesting to see what all the State of Kansas spends its money on (I’m not interested enough to actually research it, however). A spokesman for the Transportation department complained about cuts to that department’s budget to pay for other expenditures. I wonder what items supersede spending on roads.

Usually what politicians do, when they are faced with a voting populace who wants to keep more of their money, is cut spending to schools, roads, and police, and then when people complain, say, “Hey, you wanted tax cuts; this is what you get for being greedy.” Meanwhile, a lot of unnecessary spending that is hidden in the esoteric elements of the budget are protected and increased. Stupid stuff that keep the politicians in office. When people knuckle under, and agree to let the politicians abscond with their earned wealth so that they can have police and schools again, the politicians double down, raise taxes, raise spending even more, and brag about how “fiscally responsible” they are.

There is a group of people; I can’t determine if they are in on the scam, or if they are just that stupid, who defend politicians’ lying, thieving ways. It only ends when the government runs out of other people’s money; when the makers get tired of being robbed by the takers, and leave the state.

What we need is something I call the “stupid people tax”. Anyone who says we need to raise taxes should automatically have his tax rates increased to 50% (not progressive; a flat tax of half their income). If he continues to maintain a need for  increased taxes, then his rate goes to 75%. If he still agitate for tax increases, then he gets hit with a 50% wealth tax in addition to the income tax.

Here is an article from a year ago that claimed that the tax rates were a success.

Here is another article from earlier this year, that includes an interview with Governor Brownback, in which he gives his theory why tax receipts are down. He claims that it is the sales tax revenues that are down, due to low commodity prices, while tax revenues from the lower personal income taxes are actually higher.

And here is yet another article that kind of puts things in perspective. An excerpt:


…from 1998-2012, “Kansas ranked 38th in private-sector job growth, according Bureau of Labor Statistics data crunched by the Kansas Policy Institute. In 2013—the first year after the tax reform—the state climbed to 27th place, and in 2014 it moved to 21st, placing it in the top half of states.” Also: ” In the second half of 2014, hourly wages in Kansas grew 3.5%, according to BLS data, far faster than the national average of 1.9%.”

I decided to see if the above statement can be verified. The closest I can find is this article describing each of the 50 states and the jobs growth since 2007.

In the grand scheme of things, the economic considerations with regard to taxes are secondary to the moral considerations. It is immoral for someone to covet someone else’s wealth and/or income, even for the purposes of “helping other people”.